Hours ago, the Union Cycliste Internationale (UCI) announced that it is standing behind a report previously published by the U.S. Anti-Doping Agency (USADA) alleging that seven-time Tour de France winner Lance Armstrong oversaw the most sophisticated doping program in the history of sport. If you took this news as an indication that the embattled cyclist has finally hit rock bottom, no one would think you foolish.

After all, in the two weeks since the USADA released nearly 1,000 pages of evidence -- including damning testimony from 15 former teammates -- fingering Armstrong as the mastermind behind the U.S. Postal Service team's systematic use of performance enhancing drugs, Armstrong has been banned from cycling for life, stripped of his seven tour titles, and fired from endorsement deals with Nike, Trek, and Anheuser Busch that some pundits have estimated will cost Armstrong $150 million over the remainder of his life.

Perhaps even more damaging, the USADA report has cost Armstrong his credibility and integrity, forcing him to step down as chairman of his Livestrong Foundation and reducing his future earning power as a motivational speaker to nearly nil. It can't get any worse than that, can it?

Oh yes it can. The UCI's decision was more than ceremonial, as the organization was the only one with the power to formally strip Armstrong of his Tour titles. And while Armstrong is likely to continue to profess his innocence -- his legendary oversized ego barring him from admitting guilt until someone can produce a picture of him ascending the Alpe d'Huez with an IV bag full of tiger blood dangling from his femoral artery -- his adamant denials are no longer enough to protect him. With his victories wiped clean from the record books, race organizers and former sponsors can now begin the process of recovering payments previously made to Armstrong for winning those events.

For illustrative purposes, let's look to Armstrong's most notable achievement: his consecutive Tour titles spanning from 1999 to 2005. During this run of dominance, Armstrong received bonuses from Tour officials for each stage win, each day he wore the leader's yellow jersey, and of course, each overall victory. These payments are rumored to have totaled nearly $5 million over the seven-year period.

Armstrong's compensation wasn't limited to race winnings, however. Tailwind Sports, the owner of Armstrong's team sponsor during each of his tour victories, had procured insurance contracts that paid Armstrong over $12 million in performance bonuses during that span. Particularly worthy of note was a $5 million reward Tailwind agreed to pay Armstrong upon winning his fifth consecutive title in 2004. The payment was covered by a policy Tailwind had taken out with Texas-based insurer SCA Promotions, who initially balked at paying the bonus amidst rumors that Armstrong's victories had been fueled by drug use. The case eventually went to arbitration, where SCA was forced to pay $7.5 million to Armstrong, representing the original $5 million bonus and $2.5 million in interest and attorney fees.

Now that Armstrong's titles have been officially vacated, it's extremely likely that Tour officials are placing hurried calls to their legal department to start the process of recovering the $5 million in winnings previously paid to Armstrong. For its part, SCA Promotions will quickly stake their place in line, as they were angered during the arbitration process by what they viewed to be arrogant, dismissive behavior by the cyclist's legal team.

Should all of these claims come to fruition, Armstrong may be cutting a lot of checks in 2013. Which begs the question: What will be the tax consequence if Armstrong repays race winnings and bonus amounts that were previously included in his taxable income as compensation?

The issue is not one of deductibility. Because the bonuses were originally earned in Armstrong's trade or business of being a cyclist, any repaid compensation should be deductible as an ordinary and necessary business expense. Rather, the problem Armstrong faces is one of tax benefit.

If the doomsday predictions surrounding Armstrong's future income stream are to be believed, it's possible Armstrong may pay out more in bonus restitution during 2013 than he takes in as income. As a result, he may not be able to reap the full tax benefit of the deductions related to his repayments. And even in the event Armstrong is able to fully utilize his deductions in the current year, he may have been subject to a higher tax rate when the bonuses were originally earned -- particularly during the pre-Bush tax cut years of 1999-2001 -- than he is today. In either scenario, Armstrong would likely enjoy a larger tax benefit if he could travel back in time, exclude the bonus payments from income in the year they were received, and redetermine his prior years' tax liability.